InvestorQ : Does institution take positions in block trade or regular market?
Rahul made post

Does institution take positions in block trade or regular market?

Answer
user profile image
Juvina Maggie answered.
1 year ago


Broadly, institutional investors participate in the Indian market through three broad routes and this includes the FPIs, mutual funds, insurance companies, etc. Here are the 3 popular routes available to institutions to trade in the stock markets.
The regular market is obviously open to trade where orders are placed through brokers.  Such orders are given to institutional sales traders and then these are passed on to the dealers who execute the orders. Confirmations are given to custodians of institutions.

Institutions also have access to the Block Deal market where the shares are exchanged in the Block Window post trading hours. Since the regular traders will not be available in this market, institutions can execute the trade at the best price of their choice.

Finally, there is also the algo route to trade. Here, there is limited manual intervention for institutions to trade in the markets. Instead, the algos use complicated programs and then use their low latency servers to execute these trades.
Institutions have access to all the three options and can choose the option that best suits them.